D.C.'s Historic Crime Wave Is Scaring Away Office Tenants And Retailers

One morning last July, an office tenant near McPherson Square in Downtown D.C. requested a security escort from the building's management. The tenant’s guests, staying at hotels a few blocks away, were afraid to walk to the office alone after they had witnessed an armed robbery at a building next door.

Blake Real Estate President Owen Billman, whose firm owns the building at 1425 K St. NW, said the landlord couldn’t provide an escort, but the property's staff suggested the guests take a cab or an Uber for the two-block trip.

It is an incident that’s seared into Billman’s memory. His firm owns several 1960s and 1970s-era office buildings downtown, and he told Bisnow the moment illustrated similar concerns he has heard from tenants over the past year as D.C. has seen a spike in crime. 

“That was a big red flag,” he said.

“If people aren't feeling like I can walk a block to get from my office or my guests shouldn't walk the block to get from their hotel to the building or from the building back to their hotel, that's a problem,” Billman added. “And that’s the kind of thing that would then have, in my mind, have a tenant consider, ‘Do I want to be downtown?’”

Many U.S. cities saw crime increase during the first years of the pandemic before receding, but in D.C., violent crime incidents spiked to their highest levels this century. Organized retail theft and vandalism have taken a toll on local businesses, but there have also been high-profile carjackings and homicides in the heart of the city's central business district.

On a Monday evening in late January, a real estate lobbyist was fatally shot in a carjacking spree near the convention center, and later that night, a 35-year-old father of two was shot and killed near the NoMa-Gallaudet U Metro station as part of the same spree.

Less than two weeks later, the CEO of a federal government tech contractor died after an altercation at Midtown Center, the office complex that Fannie Mae has decided to vacate early.

More than a dozen D.C. commercial real estate industry leaders have said in recent weeks that crime in the District has become a top concern among companies considering taking office or retail space.

The same fear is driving developers to reconsider where they build and investors to rethink whether they should bet on the city.  

“You have folks who are looking at breaking their leases because of crime or costs associated with crime,” said Eric Jones, vice president of government affairs for D.C.’s Apartment and Office Building Association. “People aren’t coming into the office or everyone leaves at 3 p.m. because you don’t want to be in the city when it gets dark.”

District officials and policymakers have taken steps to address the concerns. The D.C. Council on Tuesday passed an omnibus bill aimed at curbing crime, and the mayor’s office installed an inaugural safety hub in Chinatown and unveiled the Downtown Action Plan, which recommends the District invest $31.5M for public safety measures over the next five years.

Those measures need to start getting results soon, industry leaders say, because a rise in crime over the last year has damaged the image of D.C. among tenants and investors. 

“The big issue right now is that sentiment is pretty bad,” Feldman Ruel Urban Property Advisors co-founder Ian Ruel said. 

Homicides in D.C. last year were at a 26-year high. Violent crime was up 39% from the year before, and property crime was up 24%, according to D.C. Metropolitan Police Department data. Carjackings nearly doubled in 2023. Crime has started to trend down this year, with violent crime and property crime both down 12% from 2023. 

Ruel acknowledged that there has been a dip in crime to start the year, but he said it needs to be sustained to change the attitudes of investors, many of whom don’t live in the city.  

“The sentiment is: ‘D.C. is impossible to do business in, there’s crime that’s rampant everywhere, and there’s a better option right across the river,’” he said. “So why would you take a risk in D.C.?” 

The Impact

Lobbying firm The Madison Group had its office at 15th and L streets northwest for more than a dozen years, but after the pandemic-induced remote work shift, Managing Partner Robb Watters said the streets around its workplace became noticeably less safe.

“In the last couple of years, you could just see everything turn,” he said. “Businesses are boarding up and crime is rampant. There’s less of a police presence.”

Watters decided to relocate his company in 2022 to 1730 Pennsylvania Ave. NW, a block he said felt safer due to its proximity to the White House. He said being a lobbying firm meant he needed to maintain a downtown D.C. presence. Otherwise, he would have left the District due to safety concerns. 

“We have to be in Washington,” Watters said. “If we didn’t, I’d be in Virginia in a second.”

Newmark Senior Managing Director Doug Damron, who represented Madison Group in its move, said crime has become a much greater concern for office users over the last four years, as the city has seen a “downward spiral.”

“My clients want to feel safe and secure, and if things aren’t fixed quickly, they will move out of the District,” he said.   

Erica King, who represents office tenants as a leasing broker with Cresa, said concerns about crime are driving leasing decisions. 

“We’re seeing clients give a really hard look at where they want to be located, really because of the crime,” she said.

Last spring, Craig Deitelzweig was looking at purchasing an office building in downtown D.C.

But the property was next to a downtown park that didn’t feel safe, so he decided against the acquisition, the CEO of New York-based Marx Realty said at a Bisnow event this week.  

“That does come into our thinking,” he said. “The park is now doing a lot better, but even still, we remember what that park was like during the ‘bad days,’ and we prefer to be a few blocks away from that park.”

CBRE Executive Vice President Amy Bowser said that for the first time in her 25-year career, crime considerations are regularly coming into leasing conversations.

“It really hasn’t been until the last year and a half that I've been on multiple calls with brokers, and tenant parties present as well, discussing the crime stats by neighborhood as they’re analyzing their relocation options,” Bowser, who represents landlords in the District, said onstage at a Commercial Real Estate Women Network event in January.

She clarified through a CBRE spokesperson that crime hasn’t affected any of her deals. 

The East End, which encompasses Metro Center, Penn Quarter and Mount Vernon Triangle, has been pulled off many tenants' lists, King said, with the Gallery Place-Chinatown stretch a particular concern. Tenants she is worked with in the District are now only looking at buildings with 24-hour security. 

“Security is on the forefront of everyone’s priority list,” she said.

In 2022, Walmart shifted its government affairs office from Chinatown to the Capitol Riverfront neighborhood in Southeast D.C. A source involved in the deal told Bisnow it decided to leave its lease at 701 Eighth St. NW two years early after a homicide in front of its building. 

“That killing was part of why they wanted to get out of there,” the source said. 

The source, who was granted anonymity to discuss confidential leasing considerations, added that Walmart appears to be an outlier and most tenants aren’t making relocation decisions due to crime. Walmart didn’t respond to Bisnow’s request for comment. 

Last month, the owner of Stadium Sports Bar & Smokehouse, near where Walmart relocated, announced the restaurant would close due to crime, just a few doors from where Lululemon closed earlier in the year after the store was robbed at gunpoint.  

Brine Oyster & Seafood House in November shuttered both of its locations, in Dupont and on H Street Northeast. Its owners cited rising costs and crime. A CVS in Columbia Heights closed in February after months of dealing with thefts that left shelves empty. 

“Crime does affect people’s dining out patterns and shopping patterns, and if it affects them, then that will affect where a thoughtful retail tenant will look to locate,” Miller Walker Retail Real Estate co-founder Bill Miller said.

Miller said D.C. tenants looking to expand are broadening their searches to the Maryland and Virginia suburbs for the first time, prioritizing proximity to their customers who may not want to make the trip into the city.

Billman said Blake Real Estate's downtown buildings are seeing very little interest from new retailers. 

“Retailers can locate in any part of town. They can locate in the suburbs, Bethesda and Arlington, they can be in Georgetown. So they don’t have to be on Connecticut Avenue, and they’re choosing not to be right now,” he said. “So new retail downtown has been challenging.” 

Blake’s tenants have experienced break-ins, smash-and-grabs and suspects just walking in the door and taking merchandise, Billman said. 

D.C.’s business improvement districts regularly field complaints from community members and businesses, and the leaders of two downtown BIDs, DowntownDC BID President Gerren Price and Golden Triangle BID’s Leona Agouridis, say they have heard many about crime. 

“We are absolutely hearing from people who are concerned that they have an employee who left the building and faced an uncomfortable encounter with someone on the street, or someone who was picking up someone from a vehicle to be harmed or to be hurt in a carjacking,” Price told Bisnow. “So there are real concerns that we're hearing about.”

The Response

City officials and policymakers say they are aware of the problems and are taking steps to address them.

“Public safety, and its impact on residents and businesses, is the District’s top priority,” Deputy Mayor for Planning and Economic Development Nina Albert told Bisnow in a statement.

“We are committed to a whole-of-government approach to driving down crime, and we are already seeing positive results from the interventions we have put in place since last summer. Crime is down the first two months of this year, and with this week’s passage of Secure DC, we are taking another critical step toward building a safer, stronger DC.”

On Tuesday, the D.C. Council passed the Secure D.C. Omnibus Amendment Act, which creates “drug-free zones,” rolls back some restrictions placed on police officers in pursuing suspects and allows for harsher punishments for crimes like illegal gun possession and retail theft.

The Downtown Action Plan, spearheaded by the BIDs and released last week, recommends the District invest $31.5M in public safety through measures like creating a real crime policy center, drafting legislation targeting coordinated retail theft and expanding resources for a recently implemented safety grant program. 

“We weren’t originally going to talk about public safety in the Downtown Action Plan,” Agouridis told Bisnow. “And then we started to really talk to people, and people brought it up. It came up as part of being critical for economic development.” 

Although members of the real estate community who spoke with Bisnow said initiatives like these are a good start, they said there needs to be more in the pipeline. 

“Until we see the work be put into action, the general sentiment is there’s not a tremendous amount of high hope for what’s currently being proposed,” Cresa’s King said.

Seventy business associations and industry groups wrote a letter to the mayor and council at the end of February to express a “deep concern about the alarming increase in violent crime across our city.” 

The letter referenced seven high-profile violent crimes within the last year, five of which resulted in deaths. It included an incident last month that hit especially close to home for the real estate community. A Housing Policy Council executive and former Trump administration official, Mike Gill, was shot as part of a carjacking rampage, and he later died. The incident was in central downtown, on the 900 block of K Street Northwest. 

Like cities across the country, D.C. has a shortage of police officers. Last March, the force was the smallest it had been in half a century, with just over 3,350 sworn officers, a number that had declined further by August, WJLA reported. Mayor Muriel Bowser in April announced a $25K hiring bonus to attract officers.

Agouridis remembers a time when the Golden Triangle area had dedicated foot and bike patrol officers. 

“They’re gone now, and we can’t get them back, at least not until they staff up,” she said. 

That shortage is affecting how tenants can respond to safety concerns.

When restaurants or bars request police security, there are sometimes not enough officers to go around, Restaurant Association of Metropolitan Washington President Shawn Townsend said. Even in instances when a restaurant or bar is ordered by the city to request security following an incident, the officers may not show up. 

“Our officers have so many other priorities that they can’t even work the overtime requests that some of our nightlife venues have put in,” he said. 

Conversations among the owners and managers that make up AOBA's membership about increasing security costs by tens or hundreds of thousands of dollars used to be a rarity, Jones said. Now, it's a given, with more operators hiring armed guards.

“Having that conversation now, that conversation is, ‘How much have your costs gone up, five or six figures?’” he said.

At the beginning of the month, the mayor unveiled $950K in funding for the Safe Commercial Corridors Grant Program to “promote public safety and public health through evidence-based activities for residents, workers, and visitors.”

The Golden Triangle BID and the DowntownDC BID were two of six organizations to receive funding. Agouridis said the program will help fill the void of the regular MPD foot and bike patrols that she was accustomed to. 

For the DowntownDC BID, the grant will be directed to hiring ambassadors for the Gallery Place-Chinatown corridor to build relationships with businesses and support MPD. While Price said the BID is excited about the effort, he knows it isn't enough to change the narrative.

“Things like that are just the tip of the iceberg,” he said. “We have to do more to make sure that people feel safe.” 

Jon Banister contributed reporting.